The objective of the Project is to upgrade the country's transport infrastructure to a condition that facilitates the transportation of freight and passengers at a cost-efficient level of service. The restructuring will enable the completion of road and bridge works that were part of the Forest Products Transport Project (FPTP) but could not be completed before loan closure in April 2006, because of severe fiscal space restrictions that constrained the Ministerio de Transporte y Obras Publicas (MTOP) budget. These budgetary constraints were triggered by the compliance of targets agreed between Uruguay and International Monetary Fund (IMF), as part of a program to improve the fiscal situation of the country which was highly affected by the Argentine macroeconomic crisis. One direct implication is that several capital investments planned could not take place or were delayed due to uncertainty in budget allocation, as priority was given to the maintenance of existing roads which were key to the economy. Loan 4204 was amended to help the country deal with the crisis. As a result, some road and bridge works initially planned under Loan 4204 could not be undertaken before the approval of the new budget in March 2006. The changes in the Project's design have high priority and are consistent with the original project objective. These changes consist of replacing a number of sub-projects included in schedule two to the loan agreement and annex C to the implementation letter with roads that had originally been part of loan 4204 and were not completed because of budgetary restrictions. The works initially planned under the loan agreement and being replaced will be undertaken later in the period 2005-2010 by the Borrower using other sources of funding.